Summary Osteoarthritis (OA) is a debilitating disease that, according to the Arthritis Foundation, affects over 27 million Americans. The disease is characterized by a breakdown of articular cartilage extracellular matrix (ECM) molecules, including collagen type II, aggrecan, and hyaluronic acid (HA). As the ECM degrades, symptoms appear including pain and increasing joint stiffness. Once loss of collagen occurs, it is believed that the opportunity for unaided cartilage regeneration is lost. With this in mind, we previously described synergistic effects of combining a functional mimic of aggrecan with aligned cartilage to prevent matrix degradation and promote cartilage ECM synthesis by primary bovine chondrocytes !#. However, in humans, we are limited in our supply of chondrocytes, and harvest of primary articular chondrocytes can lead to donor site morbidity. Adult mesenchymal stem cells (MSCs) are a promising cell source because they can be harvested without injury, have a high proliferation capacity, and can differentiate into chondrocytes under appropriate environmental conditions. One major challenge of utilizing MSCs, however, is that grafts seeded with MSCs do not produce as much matrix as grafts seeded with differentiated chondrocytes !$%&#. Thus, it is vital to establish conditions for effective differentiation and subsequent matrix production. Our long-term goal is to use MSCs in tissue-engineered cartilage to replace cartilage damaged by osteoarthritis. To achieve this goal, our objective is to create an environment that resists the destructive cycle of cartilage degradation from OA, mimics the native cartilage structure, and promotes chondrogenic differentiation of MSCs. To address these issues, we have developed the following specific aims. Aim 1: Evaluate the effects of alignment, aggrecan mimic concentration, and BMP peptide concentration on stem cell differentiation. Aim 2: Investigate the effect of synergistic interactions on cartilage differentiation. The results from this proposal will elucidate properties of the local microenvironment that affect stem cell differentiation, resulting in enhanced matrix production and mechanical properties. These studies will thus serve as preliminary data for a future NIH R01 proposal that will evaluate these constructs in an in vivo defect model. Identification of material-based cues that result in improved cartilage grafts is essential in the development of safe and effective clinical therapies involving adult stem cells.